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Should you defer your state pension if you are still working?

If you defer you get 1% of your pension for every 9 weeks it’s deferred. You get an increased amount but you can no longer opt to take this as a lump sum.

In effect, this means if you deferred 1 year you would have to live 17 years to get back the year’s income you missed out on, although this also depends on how the government increases pensions in the future.

One argument for doing it is that it can reduce income tax if you are still working or taking significant income, however you can always take it and invest it in something like an ISA.

If you die young then you are likely to have missed out if you defer.

In short, don’t defer!

FOR INVESTMENT ADVICE REGARDING YOUR PENSION OR OTHER INVESTMENTS PLEASE CONTACT Elliott Wilson ACSI DipPFS AF3

 

While we keep information on the website as up to date and as accurate as possible, the information on this website does not form part of our advice process. Cambridge Pensions Ltd cannot accept any liability for any decisions made by a client or member of the general public based on any information contained on this website. The value of your investments can go down as well as up and you may get back less than has been paid in.

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